The impact of financial reforms and institutional quality on economic growth of five selected sub-Saharan African countries

• Main Author: Aliyara, Abdulhadi Haruna
• Format: Thesis
• Language: English; English
• Published: 2021
• Subjects: HG Finance
• Online Access: https://etd.uum.edu.my/10358/1/permission%20to%20use-ALLOWED.pdf; https://etd.uum.edu.my/10358/2/s902214_01.pdf; https://etd.uum.edu.my/10358/

The study examines the impact of financial reforms and institutional quality on the economic growth of five selected Sub-Saharan African (SSA) countries from 1984 to 2018. The specific objectives of the study are to examine the effects of interest rate liberalization and capital account deregulation, to explore the effects of interactions between interest rate deregulation and corruption and between interest rate deregulation and bureaucratic quality, to examine the interaction effects of capital account liberalization and corruption, and to explore the interaction effects of capital account liberalization and bureaucratic quality. The study utilizes the Driscoll and Kraay pooled ordinary least square and fixed-effects techniques, which are robust to cross-sectional dependence, heteroskedasticity, and serial correlation. The findings suggest that interest rate liberalization affects economic growth negatively, whereas capital account deregulation accelerates economic growth. The interactions between interest rate liberalization and corruption negatively affect economic growth, whereas the interactions between interest rate liberalization and bureaucratic quality positively affect economic growth. The interactions between capital account liberalization and corruption have negative effects on economic growth. On the other hand, the interactions between capital account liberalization and bureaucratic quality reveal positive effects on economic growth. Therefore, the study recommends that various governments implement policies geared toward more capital account openness. The five sample countries must also implement strategies geared toward eradicating corruption. Hence, to benefit from the numerous advantages of financial deregulation, the study suggests that the sample countries must improve their institutional environments. Finally, the findings indicate the critical role of a sound and conducive business environment for any form of successful financial liberalization.